🚨 Mr. Powell signals interest rate cuts at Jackson Hole

📌Summary of his speech at Jackson Hole:

- Possibility of a rate cut in September: He acknowledged that "the balance of risks is shifting", current policy remains tight and "MAY NEED TO BE ADJUSTED SOON".

- Labor market: He believes the labor market is in a "strange state of balance", as both labor supply and demand are slowing down, and the risk of job weakening could arise faster than expected.

- Inflation & tariffs: Tariffs are pushing consumer prices up, and the impact may be prolonged, but the Fed still views it as a temporary factor.

- New policy framework: The Fed will learn from 5 years of high inflation, providing long-term guidance to avoid being "too tight" or "too loose for too long".

-> The market reacted strongly: Dow Jones +900 points, S&P 500 and Nasdaq rose nearly 2%. CME FedWatch raised the probability of a rate cut in September back to around ~90%.

📌 Unprecedented political pressure on the Fed: Trump continuously attacks Powell, and Governor Lisa Cook is likely to leave the headquarters. The Fed faces two paths: It must prove its independence from the White House while reassuring a market thirsty for liquidity.

👉 Overall, the signal for a rate cut is clear, and the Fed is likely to cut rates in September.